Buying guide
Brightline test explained
Everything you need to know about New Zealand’s capital gains tax
AI summary
New Zealand's brightline test taxes profits from selling residential property within a two-year period, as of July 1, 2024. The profit is added to your income and taxed at your marginal rate.
Key exemptions from the test include:
- Your main home, unless you have a pattern of frequent trading or rent out over 50% of it.
- Inherited property and relationship property settlements.
Tax is calculated on net profit after deducting costs like agent commission. Always consult a tax accountant for advice.
What is the brightline test?
Why the NZ brightline tax was introduced
The family home is usually not covered by the brightline, unless it's been rented out.
Exceptions to the brightline test
Your main home
Inherited real estate
Relationship property
Your capital gains may be taxed if:
You’re in a pattern of buying and selling property for profit
You’re a builder or property developer
You’ve rented out your main home
The bigger the gain, the higher the tax.
You’ve sold the property to an entity
How to work out how much you’ll be taxed
Get expert advice from a tax accountant
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